To solve the housing crisis, we need a National Housing Fund

Some houses, of exactly the sort that you will never own. Image: Getty.

Welcome to the housing crisis, part 4526. So far this month, we have learnt that planning permission has been granted for 320,000 homes but they have not been built; the housing market is slowing down; and people are spending more of their incomes on housing than ever before. But even with the scale of the problem, and a hamstrung government, things don’t have to be this way.

Housing is a significant challenge for our cities, a major solution to which is getting more homes built. It’s not surprising that all of the newly elected metro mayors are prioritising it – from Ben Houchen in Tees Valley, who wants to build a new small town to meet local housing demand, to James Palmer in the Cambridgeshire & Peterborough, who put affordable housing at the centre of his manifesto, and Andy Burnham, who is refocusing the Greater Manchester Spatial Framework to tackle the housing crisis. Efforts by the new mayors are welcome – and if central government gives city regions more powers and flexibility, they will be able to make a much bigger contribution to meeting local housing needs.

But all cities exist within a wider national context. Planning permission is being granted but homes are not being built in all parts of the country. Giving local authorities the powers to deal with that is likely to take years, especially when no party has a majority in parliament to drive through new legislation.

The business model of private housebuilders does not vary from city to city: homes will only be built at the rate at which developers think they will be able to sell. Moreover, a market downturn that starts in London is likely to mean fewer homes are built in all parts of the country.

What we urgently need from government is action at the national level to, first, speed up new development: those 320,000 phantom homes would make a real difference around the country if they got built. Second, investment needs to be focused on getting the market working better over the long-term. That means supporting smaller builders so that we have a more diverse marketplace with more people in the business of building.

Third, we need to build the right types of homes. Building more homes for sale won’t help those who will not be able to afford a deposit anyway. Building more homes at reasonable rents will help people more quickly.


That’s where ResPublica’s new report comes in. Working with leading housing associations, we are proposing a National Housing Fund that would invest substantially (£10bn annually for ten years) in new homes for rent: we project at least 40,000 new homes a year could be built. These would be available under family friendly long-term tenancies, at reasonable and predictable rents.

It could buy homes on existing planned but stalled developments to reduce that number of phantom homes; and would support small developers to bring forward plans for more new homes by providing them with certainty of sale. Each year some tenants, enabled to save by paying reasonable rents, would be offered opportunities to buy their homes; proceeds would be reinvested in building replacements.

How can we afford this major new investment? After the 10 years of investment, housing associations would start paying back off the government’s investment.

In the meantime, our research finds that an investment of this kind is not only realistic: it’s highly desirable. The fund itself could be self-sustaining. Rents would more than cover costs of the borrowing and of managing the properties. And there would be significant wider social and economic benefits – 180,000 new jobs and £3.4bn in tax increases and welfare savings per year.

This is all about adding to existing housebuilding and policy initiatives. If cities or local authorities wanted to work with private sector developers, or build homes themselves, the fund would be there to fund it. With all parties in their manifestos committed to investing in new housing, parliamentary arithmetic need not get in the way of delivering this much-needed and overdue investment in housing.

Edward Douglas is policy & projects manager at the think tank Respublica.

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To see how a city embraces remote work, just look to Helsinki

A deeply rooted culture of trust is crucial to the success of remote work. (Sean Gallup/Getty Images)

When I speak to Anssi Salminen, an account manager who lives an hour outside Helsinki, he’s working from a wooden platform on the edge of a Finnish lake. With a blanket laid out and his laptop set up, the sun low in the sky, Anssi’s remote work arrangement seems blissful. 

“I spend around half of my time working somewhere else other than the office,” he says. “I can work from home, or on the go, and I also travel to the Netherlands once a month and work from there.

“The emphasis in my work has always been that it doesn’t matter when or where I work, as long as I get things done.”

For many people around the world, the shift to remote work was sudden, sparked by the coronavirus pandemic. Finland, however, is finding the transition much less significant. Before Covid-19, the Nordic nation already displayed impressive levels of remote working, with 14.1% of its workforce reporting usually working from home. Only the Netherlands has a comparable percentage of remote workers, while the UK lagged behind at 4.7%, and the US’s remote workforce lingered at around 3.6%

Anssi works for one of many Helsinki-based companies that offers its employees flexible policies around when and where they work. That arrangement is in part due to the Finnish capital’s thriving start-up scene. In spite of being a relatively small city by global standards it is home to over 500 technology start-ups. These companies are leading the way when it comes to keeping employees connected wherever they choose to work.

“Our company has a completely location-free working policy,” says Kasper Pöyry, the CEO of Helsinki-headquartered software company Gapps. “All meetings are made available for online participants and facilitated accordingly. Some employees have worked extensively from abroad on a working holiday, whilst others prefer the comfort and social aspects of the well-stocked office. Whatever works for our employees is what works for the company.”

Like Gapps, many Helsinki-based firms are deeply preoccupied with providing the necessary technology to attract talent in a vast and sparsely populated country. Finland has only 15 inhabitants per square kilometre, and companies understand that in order to compose teams of specialised expertise, they may have to seek talent outside of the city. Local governments take a similarly proactive stance toward technological access, and Helsinki offers free, unrestricted, high-speed Wi-Fi from city-wide hotspots, while the country as a whole boasts some of the best coverage in Europe. 

But encouraging remote work isn’t just about optimising the potential of Finland’s workforce – companies in Helsinki also recognise that flexibility has clear benefits for both staff and employees. 

“The idea of a good work-life balance is ingrained in Finnish culture,” says Johannes Anttila, a consultant at organisational think tank Demos Helsinki. “It goes back to our rich history of social dialogue between labour unions and employers, but also to an interest in delineating the rules of working life and pushing towards people being able to enjoy their private life. Helsinki has been named the best city in the world for work-life balance, and I think that this underlies a lot of the mentality around remote work.” 

For Peter Seenan, the extent to which Helsinki residents value their free time and prioritise a work-life balance prompted his move to the city ten years ago. He now works for Finnair, and points to Finland’s summer cottages as an example of how important taking time to switch off is for people in the country. These rural residences, where city residents regularly uproot to enjoy the Nordic countryside, are so embedded in Finnish life that the country boasts around 1.8 million of them for its 5.5 million residents

“Flexible and remote work are very important to me because it means that I don’t feel like I’m getting stuck in a routine that I can’t control easily,” he says. “When I’m working outside of the office I’ll go down to my local sauna and go ice swimming during the working day, typically at lunchtime or mid-morning, and I’ll feel rejuvenated afterwards… In winter time especially, flexibility is important because it makes it easier to go outside during daylight hours. It’s certainly beneficial for my physical and mental health, and as a result my productivity improves.”

The relaxed attitude to working location seems to pay off – Finland is regularly named the happiest country in the world, scoring highly on measures such as how often its residents exercise and how much leisure time they enjoy. With large swathes of unspoiled countryside and a national obsession with the outdoors, sustainability is at the forefront of its inhabitants’ minds, leading to high levels of support for measures to limit commuting. In January, Finland passed a new Working Hours Act, the goal of which was to help better coordinate employee’s work and leisure time. Central to this is cementing in law that employees can independently decide how, when, and where they work.

Yet enacting the new ruling is not as simple as just sending employees home with their laptops. For Kirsimarja Blomqvist, a professor of knowledge management at LUT University, perhaps the most fundamental feature that remote work relies upon is a deeply rooted culture of trust, which Helsinki’s residents speak of with pride. The anecdotal evidence is backed up by data which suggests that Finland boasts one of the highest levels of trust and social cohesion in Europe, and equality and transparency have always been key cornerstones of political thought in the country.

“Trust is part of a national culture in Finland – it’s important and people value it highly,” she explains. “There’s good job independence, and people are valued in terms of what they do, not how many hours they work for. Organisations tend to be non-hierarchical, and there is a rich history of cooperation between trade unions, employers, and employees to set up innovative working practices and make workers feel trusted and valued. 

“It’s now important that we ensure that this trust can continue to be built over technology, when workers might have been more used to building it face-to-face.”

As companies begin to look hopefully toward a post-Covid future, the complexities of remote work are apparent. Yet amid issues of privacy, presenteeism, and social isolation, the Helsinki model demonstrates the potential benefits of a distanced working world. The adjustment to remote work, if continued after the crisis, offers a chance to improve companies’ geographical diversity and for employers to demonstrate trust in their workforce. On these issues, Blomqvist believes other cities and employers can learn a lot from Helsinki.

“People are now beginning to return to their workplaces, but even as they do they are starting to consider the crisis as a jumping point to an even more remote future,” she says. “The coronavirus pandemic has been an eye-opener, and people are now interested in learning from Finland’s good practices… We are able to see the opportunity, and the rapid transition to remote work will allow other countries to do the same.”